The Carolina Country Club is one of the
most prestigious clubs in Raleigh, North Carolina. The club has been around for
over 100 years and membership to join is by invitation only. While the Carolina
Country Club’s most recent tax forms shows it generated nearly $13 million from
dues and other resources, the club’s nonprofit status insulates it from paying
corporate income tax.

The Internal Revenue Service tax code
allows social clubs, including those that charge members thousands of dollars
to join such as Carolina Country Club, to apply for tax-exempt status. Unlike traditional nonprofits, such as
churches or charities, country clubs are not required to have a charitable
purpose. However, the clubs still have to pay property and sales tax and tax on
investment and nonmember income. Moreover, nonprofit status for organizations
like Carolina Country Club imposes restrictions on advertising, paying dividends,
and bookkeeping privacy. The real
benefit these clubs receive is avoiding the corporate income tax.